Young Investor

Satisfaction is a state of mind

B. Venkatesh | Updated on July 02, 2011

Would you buy a branded dress on sale?

Consider this. You visit a high-end store that has a discount sale on business clothing. A dress from a certain brand is on sale for Rs 7,500 – a 50 per cent discount on its retail price. Will you buy the dress?

Satisfaction factors

Classical economics suggests that you should grab the offer. Why? For one, you like the dress. And for another, it is available at 50 per cent discount. You are hence more likely to derive satisfaction from the purchase.

Now, satisfaction is driven by two factors - pain and pleasure. You derive satisfaction if the pain of paying for the product is lower than the pleasure derived from using it. The point is that you simulate pleasure at the time of purchasing the product! After all, you have not consumed the product yet. So, you really do not know how much pleasure it is likely to give you when you actually use it. This simulated experience makes satisfaction highly dependent on your state of mind.

Simulating pleasure

Suppose you visit the dress store just after you had a business meeting with your client. You fear that the client is unlikely to renew the contract. You are obviously concerned about losing business. Your overloaded brain cannot simulate the pleasure of consuming the branded dress, even though it is available at a discount. You may therefore, pass the opportunity to buy the dress.

Suppose instead, you enter the store after successfully concluding a business deal. Your present state of mind is positive. And that is likely to help you simulate the pleasurable experience better. So, you are more likely to buy the dress. This is one reason why some patrons visit a store a couple of times before actually buying a product.

Besides, it is easy to simulate the experience when you look at a product more than once and on different occasion. Familiarity is likely to prompt your brain's “simulator” to take a positive view and enhance satisfaction- especially if you like the product but are unsure of its price!

Published on July 02, 2011

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